SME SENTIMENT INDEX RISES TO 56.8 IN 2H 2025

KUALA LUMPUR, Dec 22 (Bernama) -- The Small, Medium Enterprise (SME) Sentiment Index rose to 56.8 in the second half of 2025 (2H 2025) compared to 55.1 in 1H 2025, signalling a stronger economic momentum and rising optimism across the country’s micro, small and medium enterprise (MSME) landscape.

According to SME Bank, the improvement in the index reflected improved expectations on economic conditions, sales prospects, expansionary activities and employment despite elevated external pressures.

In a statement, SME Bank's relief president and chief executive officer, Samad Majid Zain, said that Malaysian MSMEs continue to demonstrate resilience, supported by stronger economic fundamentals and opportunities.

"The rise in the sentiment index, with 68 per cent of respondents expecting higher sales and 53 per cent planning to expand their workforce, reflects a more positive operating climate even as the business community navigates higher external import tariffs, wider sales and services tax application and adjustments in electricity costs. 

"The strongest optimism is recorded among manufacturing segments, where up to 89 per cent of businesses anticipate growth. These trends signal that MSMEs are preparing for increased demand and renewed investment activity," he said.

He added that the bank will continue to support MSMEs in strengthening their financial position, improving productivity and enhancing competitiveness as Malaysia advances toward sustainable economic growth.

Meanwhile, SME Bank's head of economic analysis, Mazlina Abdul Rahman, said 58 per cent of enterprises expect the economy to expand.

“Micro enterprises are the most optimistic at 65 per cent, whereas only 44 per cent of medium-sized firms expect growth, reflecting the impact of rising costs and external uncertainty," she said.

She added that the liquidity conditions have improved, with the proportion of MSMEs holding less than six months of reserves declining to 31 per cent from 34 per cent, and those with reserves beyond three years increasing to 15 per cent.

“Financing appetite remains high, with 81 per cent of respondents planning to obtain funding for working capital or expansion,” she said.

The SME Sentiment Index survey was conducted between July and October 2025, involving 1,971 entrepreneurs and business owners across 40 sectors and all business sizes, and serves as a key reference point in assessing Malaysia’s economic trajectory.

--BERNAMA